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Hospitals: Proposed OPPS Rule 'Will Perpetuate Healthcare Deserts'

By HealthLeaders Media News  
   July 08, 2016

CMS says removing non-emergency services from the Hospital Outpatient Prospective Payment System would save $500 million a year. Hospitals say lower reimbursements will reduce access to care.

A proposed rule from the Centers for Medicare & Medicaid Services to remove most Medicare non-emergency off-campus health services from the Hospital Outpatient Prospective Payment System has drawn scorn from the hospital sector.

The proposed rule, made public this week, would implement Section 603 of the Bipartisan Budget Act of 2015, and is expected to save about $500 million a year, according to CMS, which claims the new rule would refocus the payments on the patient and not the setting.

"This payment differential has encouraged hospitals to acquire physician offices in order to receive the higher rates," CMS said in remarks accompanying the proposal. "This acquisition trend and difference in payment has been highlighted as a long-standing issue of concern by Congress, MedPAC, and the Department of Health and Human Services Office of Inspector General. This difference in payment also increases costs for the Medicare program and raises the cost-sharing liability for beneficiaries."

That thinking was echoed by CMS Acting Administrator Andy Slavitt, who said "the items in this proposal are designed to improve care and value when Medicare beneficiaries receive care in an outpatient setting. Today's proposed updates better support physicians in providing beneficiaries with the right care at the right time."

Hospital lobbyists say the proposed rule would greatly harm hospital-based care delivery and access and skews the intent of Congress.

"We are extremely dismayed by the short-sighted policies in (the) proposed rule," American Hospital Association Executive Vice President Tom Nickels said.

"Hospitals and health systems and more than half of the House and the Senate requested that CMS provide reasonable flexibility when implementing Section 603 of the Balanced Budget Act of 2015 in order to ensure that patients have continued access to hospital care. Instead, the agency is actually proposing to provide no funding support for outpatient departments for the services they provide to patients. This does not reflect the reality of how hospitals strive to serve the needs of their communities."

The president of the American Medical Association, Andrew W. Gurman, MD, said in statement Thursday, "Providing similar payments for similar professional services located outside of a hospital campus, regardless of facility ownership, could lead to a more level economic playing field and help preserve independent practice. The new policy is more equitable for patients, who, CMS notes, often pay more for the same service provided in an off-campus department of a hospital."

'Urban and Rural Pockets of Poor Access'

Bruce Siegel, MD, president and CEO of America's Essential Hospitals, called CMS's reading of Section 603 "narrow" and said the proposed rule "threatens to reduce access to badly needed healthcare services in the nation's most underserved communities."

"The regulatory provisions CMS proposes for new off-campus hospital outpatient departments fail to recognize the practical challenges of establishing and sustaining healthcare facilities for vulnerable populations," Siegel said.

"The agency's decision to not only limit flexibility, but to withhold hospital payments altogether, will perpetuate healthcare deserts—urban and rural pockets of poor access to care that persist in all 50 states and the District of Columbia."

Siegel said the proposed rule exceeds the statutory language of Section 603 and ignores Congress's intent to apply an alternative payment system for services delivered in new facilities.

"Hospital systems that otherwise would seek to enhance access by establishing new clinics in underserved areas will not do so, as this damaging payment policy makes new outpatient centers economically unsustainable," Siegel said.

"Essential hospitals support efforts to reduce healthcare costs, but only when savings can be achieved without harming access and quality."

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